Making Sense of the Japanese Economy

Since the March 11th earthquake and tsunami, it’s been difficult to make predictions for the Japanese economy—the third largest in the world. In April, Data in Motion warned of falling demand but possible opportunities for growth following the fall-out from the natural disasters. Four months later, PIERS’ sister company, The Journal of Commerce, continues to report the Japanese economy is shrinking and exports are declining with significant trade surpluses—signs that overall recovery could be more sluggish than predicted.

The Japanese economy shrank 0.3 percent in the second quarter of this year from the preceding quarter, or at an annualized pace of 1.3 percent, in real terms, the government said in a preliminary report released August 15. The Cabinet Office blamed the decline primarily on slumping exports since March.

Exports to the United States also fell for the fifth straight month, and U.S.imports are also down. Japan posted a second consecutive monthly trade surplus in July as the country’s exports recovered.

On the plus side, analysts now expect GDP growth to return to the positive territory in the July-September quarter as industrial production is recovering rapidly. Economic and Fiscal Policy Minister, Kaoru Yosano, also told reporters he expects “relatively high” GDP growth later this year thanks to demand related to reconstruction.

Predictions and forecasts are important to businesses in the supply chain industry, but the numbers don’t lie. How will you keep your eye on Japanese imports and exports? Be ready for the next turn of the market. Contact us at (800) 952-3839 or register for a free demo to learn more about our solutions.